Swans and Ugly Ducklings

By Hugh Sidey

He is a leader at or near the peak of his influence, but perils surround him. As he heads into what may be the most challenging weeks of his presidency, Ronald Reagan must do battle over deficits, trade, taxes, farm aid and the positions he will take in Geneva at the November summit with the Soviet Union's Mikhail Gorbachev.

When the Federal Government was fully reassembled last week after the long summer holiday, all eyes were on the White House. Reagan took the stage at his dinner for Denmark's Prime Minister Poul Schluter. Somber aides hovered at the edges of the party through the evening, sometimes darting close to confide something to the attentive President. Anticipation was etched on his face. He turned to his lovely dinner companions, Lisbeth Schluter and Katherine Evans, editor of the Washington Journalism Review, and explained: "If somebody comes up and whispers in my ear and I have to get up hurriedly and leave the table, don't be alarmed. It is because Pete Rose has hit." Rose did not get his milestone hit until the following night, so the President, uninterrupted, went on to tell stories about his ranch, his old friend Jimmy Stewart and the hazards of official dining and wining, which a President must lead ("Being first is a problem. I have to eat so much").

So it went all evening, and doubtless will go in the days ahead as events collide with the legendary imperturbability and good humor of Reagan. He will give ground, as he already has on South African sanctions and trade, but with hardly an admission that he is changing or that he is troubled. He wants to hold on to his good-guy credentials as long as he can, hoping they may yet soften the onslaught.

"Our efforts at tax reform remind me of one of Denmark's better-known fairy tales," said the President during his dinner toast. "When I talk about (reforming the tax system), I can visualize a beautiful swan. All the special interests see is an ugly duckling."

At one point National Security Adviser Robert McFarlane came up to Reagan to tell him that the eldest daughter of El Salvador's President Jose Napoleon Duarte had been kidnaped by gunmen. "I wouldn't have bothered you, Mr. President," said McFarlane, "but Dan Rather is here, and he knows about it. He might ask you." A grateful President held his warm smile, armored against any ensnaring questions.

By refusing to dwell on or even acknowledge the problems that are headed his way, Reagan seems to derail a lot of them. As another occupant of the Oval Office, Calvin Coolidge, said, "If you see ten troubles coming down the road, you can be sure that nine will run into the ditch before they reach you." Coolidge's portrait still hangs in the Cabinet Room for daily inspiration.

In a way the struggle now joined is between Reagan's instincts and the statistics and computer printouts of the experts, the intuitive Westerner vs. the political-academic elite of the Potomac River valley. Reagan believes that Government spending, except for defense, should be cut much more, but if Congress refuses to cut enough, it is better to borrow the money than raise taxes. The irony is that Reagan, having educated the nation about the evils of huge deficits, now wants to change the subject.

Secretary of the Treasury James Baker carries with him a few quotes collected over the years from some of the experts. One is from 1982 by New York Financier Felix Rohatyn: "Huge deficits will push interest rates higher until the economy really goes into a nose-dive." Interest rates did not go up, and the economy has not gone down. But even Reagan loyalists like Baker know that it is getting harder to conjure up the swans with all the ugly-duckling economic facts that now crowd the water.